Global BV News and Trends January 2023
Business valuation news from a global perspective.
High ESG scores lower the cost of capital, study finds
A recent paper says there is significant evidence that companies having a higher environmental, social, and governance (ESG) score have a lower cost of capital.
Reminder: The 2023 Pepperdine private cost of capital survey is now open
Every year, Pepperdine University conducts an annual survey of expected rates of return with respect to private companies.
Damodaran posts his data update for 2023
At the beginning of each year, Professor Aswath Damodaran (New York University Stern School of Business) generously posts a great amount of data on his website that include risk-free rates, equity risk premiums (ERPs), corporate default spreads, corporate tax rates, country risk premiums, and other data—all of which are free.
The 2023 Pepperdine private cost of capital survey is now open
Every year, Pepperdine University conducts an annual survey of expected rates of return with respect to private companies.
BV News and Trends December 2022
A monthly roundup of key developments of interest to business valuation experts.
Takeaways from the final big BV event of 2022
The beach or the ski slope? Those were the options for attendees who ventured out to either Park City, Utah, or Fort Lauderdale, Fla., for the NACVA Business Valuation & Financial Litigation Super Conference last week.
Firm nimbleness as a measure of risk
Investors perceive firms with higher levels of inflexibility, such as not being able to scale operations or adapt to changes in profitability, as being riskier and have a higher implied cost of equity, researchers conclude in a new paper.
New Pepperdine Report Creates Buzz at the NACVA Conference
One of the more well-attended sessions at the Business Valuation & Financial Litigation Super Conference hosted by the National Association of Certified Valuators and Analysts (NACVA) was a session Dr. Craig R. Everett conducted. He is the project director of the Private Capital Markets Project from Pepperdine University, which does an ongoing survey of expected rates of return of providers in the private capital market.
Estimating the Extra Risk of Customer Concentration
Interesting comments were made by Roger Grabowski (Kroll), who conducted a session at the American Society of Appraisers International Conference. He discusses the research in this area and how to examine the customer concentration of guideline public companies.
Ang Offers SSBV Members More Evidence of the Lack of a Size Effect
Clifford Ang (Compass Lexecon), who offered an impassioned plea to a large group from the UK’s Society of Shares and Business Valuers (SSBV), has become one of the leading proponents of eliminating or minimizing the traditional size premia. Ang has written a number of articles on the size effect and has a new book, Applied Valuation, due out early next year.
Huge turnout for the AICPA FVS conference
At 800 attendees, the AICPA & CIMA Forensic and Valuation Services Conference in Las Vegas was the largest event we’ve been to this year.
Inflation showcased in lead-off session at the AICPA FVS conference
As this issue rolls off the (virtual) presses, BVWire is attending the AICPA & CIMA Forensic and Valuation Services Conference.
Global BV News: KPMG releases cost of capital study
KPMG has published its “Cost of Capital Study 2022” that addresses the impact of high inflation on company valuations.
Most firms can’t forecast impacts of ESG
A new global survey highlights the difficulty in quantifying the financial impacts of environmental, social, and governance (ESG) factors.
Competition keeps cost of capital platform prices down, experts believe
That’s the feeling of a panel of veteran valuation experts who presented at the recent Forensic and Valuation Conference hosted by the Virginia State Society of CPAs.
Inflation, volatility trigger increase in ERP, per Kroll
Kroll has increased its recommended U.S. equity risk premium (ERP) from 5.5% to 6.0% when developing USD-denominated discount rates as of Oct. 18, 2022.
BV News and Trends October 2022
A monthly roundup of key developments of interest to business valuation experts.
Another issue of the ASA’s journal added to BVResearch Pro
Every month, subscribers to the BVResearch Pro platform get access to new articles, books, court cases, webinar transcripts, and more that are added to the almost 20,000 pieces of content.
Another call to discard CAPM
“Unfortunately—and I write this with a heavy heart—the CAPM is not just imperfect; it is so badly wrong that it is best ignored,” writes Ivo Welch (UCLA Anderson Graduate School of Management) in an article “The Cost of Capital: If Not the CAPM, Then What?”
CFOs ignoring cyber risk despite huge losses
A Kroll report finds that 82% of the executives in its survey said their companies suffered a loss of 5% or more in their valuations following their largest cyber security incident in the previous 18 months.
BV News and Trends September 2022
A monthly roundup of key developments of interest to business valuation experts.
‘ESG Ratings: A Compass Without Direction’
That’s the title of a new paper out of the Stanford Graduate School of Business that examines the concerns over the reliability of the various ratings schemes for environmental, social, and governance (ESG) factors.
BV News and Trends August 2022
A monthly roundup of key developments of interest to business valuation experts.
Key Lesson to Be Learned From Valuing a Strip Club
A strip club may bare all, but not when it comes to every bit of information an analyst needs to do a valuation. The trick is knowing the right questions to ask to discover these hidden factors that may impact value, and that goes for other types of businesses as well.